Summaries of health policy coverage from major news organizations

PBGH to Offer New Fixed Account Health Plan Designed to Cut Business’ Costs

The Pacific Business Group on Health, a San Francisco-based purchaser of insurance for 44 California employers, is expected to announce today that it will offer a new plan designed to shift more costs to employees and give them greater flexibility, the Contra Costa Times reports. The plan, run by Minnesota-based Definity Health, "veers away from traditional managed care plans," as it requires no copayments or referrals and offers consumers a "wider selection of doctors and hospitals." Instead, each employee receives a "personal care account" in which their employers deposit $1,000 to $2,000 per year. This money can be used for all health care needs other than preventive care, "which is already fully covered by the plan." Unspent funds can be carried over to the next year, when "employers will once again make a deposit." If an employee uses all the money in his or her account, the employee has to pay a deductible for additional health care for the remainder of the year. Deductibles will vary according to each employer plan and will be based on whether the personal care funds were used for "traditional or nontraditional care." According to Chris Delaney, vice president of marketing for Definity Health, the typical deductible for consumers who spend their personal accounts on traditional care might be $500; the cost would rise if the account was used for nontraditional expenses, such as vision or dental care. Once an employee pays the deductible, the coverage moves closer to managed care; the health plan will cover 90%-100% of the costs for visits to physicians in Definity's California network, which includes 75% of the state's physicians. The three large employers that have used the new plan in 2001 -- its inaugural year -- have saved about 10%, Delaney said (Silber, Contra Costa Times, 11/8).

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